What do I do if my car was repossessed and now they want money because they sold it for less than was owed? 10 Answers as of October 08, 2012

No one EVER told me that the car would be auctioned or that I would be responsible for the difference. I've already taken the credit hit for the next 10 years. (I thought it was 7).

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William Bidwell, Attorney at Law | Bill Bidwell
A loan deficiency is generally independent from tax consequences. You have a tax liability only if the lender/creditor forgives the liability; any forgiven debt is taxable as income.
Answer Applies to: Michigan
Replied: 10/8/2012
James T. Weiner & Associates, P.C.
James T. Weiner & Associates, P.C. | James T. Weiner
Generally You pay the debt.. or you file bankruptcy.. You may try to negotiate the debt down for less than is owed.
Answer Applies to: Michigan
Replied: 10/8/2012
MatthewR. Schutz, Esq | Matthew R. Schutz
The lender can dispose of the vehicle in a commercially reasonable fashion. An auction would qualify. If you read your loan agreement, you will find you are responsible for any shortfall. You can try and negotiate with the lender, fight it out in the courts, or go bankrupt. This decision will depend on you financial condition.
Answer Applies to: New Jersey
Replied: 10/8/2012
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
They do not need to tell you, so you will have to ultimately settle with the lender or file bankruptcy in order to wipe out that debt.
Answer Applies to: New York
Replied: 10/8/2012
Law Office of Stuart M. Nachbar, P.C.
Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
In NJ, I would counsel you to file bankruptcy so that you are not responsible for any difference between what it was sold for and what they felt they would get for it.
Answer Applies to: New Jersey
Replied: 10/8/2012
    Victor Varga | Victor Varga
    You may have a defense, as they are required to notify you of the repossession (after they take the car), and also give you written notice of where and when the auction date would be, so that you would be given the opportunity to also bid on the car. Ask them for all notices that they claim that they sent to you. If they cannot produce, then you don't have to pay, but don't just not pay or not call them. You will probably need a lawyer to help you.
    Answer Applies to: Maryland
    Replied: 10/8/2012
    Brehm Law Office
    Brehm Law Office | Peter C. Brehm
    Yes they can do that, as long as it was explained in the agreement you signed when purchasing the car. Its called a deficiency judgment.
    Answer Applies to: Wisconsin
    Replied: 10/8/2012
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    This assumes you are an Arizona resident: A creditor has the right to receive the full amount of their debt. Unfortunately, it is very hard to predict what will be paid at the auction. You are responsible for the balance, plus all their costs. A bad debt stays on your credit report for 7 years. A bankruptcy for 10 years.
    Answer Applies to: Arizona
    Replied: 10/8/2012
    Law Office of Andrew Kern
    Law Office of Andrew Kern | Andrew Kern
    A Chapter 7 bankruptcy will wipe out the debt.
    Answer Applies to: California
    Replied: 10/8/2012
    Stone|Novasky, LLC
    Stone|Novasky, LLC | Robert Novasky
    When you purchased your car, you probably signed a contract for payments. In all likelihood, the contract contained provisions that allowed the creditor to seek the deficiency from you if your car was repossessed and resold for less than the amount owing. You may want to review the documents you signed when you purchased the car to see if you can find that language. Assuming there is language to that effect in the contract, you are responsible for the deficiency between the sale amount and the amount that was owed on the contract.
    Answer Applies to: Washington
    Replied: 10/8/2012
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